Alliance education spokesperson Liz Gordon said today that the New Zealand University Students Association should understand the necessity to balance priorities in the methods of setting student loan interest rates under current law.

"There was significant pressure on the government to increase the overall student loan interest rate this year to 7.9%.

In coalition negotiations, the Alliance was instrumental in preventing such a rise and retaining the rate at 7%".

"The Alliance's long term policy is to re-establish free tertiary education. But this is not feasible under current financial constraints. In coalition, one of our key goals is to limit any increase in costs to students so far as possible. We push to get the best we can under current circumstances, constantly looking at ways to bring the costs down. Had we not insisted on NO RISE in the interest rates, all student loan borrowers would have faced higher costs".

"It is important that students are clear as to the choices:

- either higher loan interest rates for all borrowing students, - or hold the rates at 7% with an inflation adjustment for students repaying loans.

"Unfortunately, inflation hit nearly 4% in the past year. The NZUSA is right to say that the formula chosen will affect the interest write off for some students. But wouldn't it have been much worse if interest rates had been raised for all student borrowers?"

Since it became part of the Government in 1999, the Alliance has worked closely with student organisations. Liz Gordon said that she was disappointed that NZUSA had not attempted to discuss this with her, as she could have explained the complexities.

"The Alliance is always happy to discuss priorities with student groups" said Dr. Gordon.

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